Do we need to pay FBT on the ‘car parking’ of a utility truck designed to carry a load of less than one tonne where there is no FBT payable on this vehicle due to usage being limited to work-related travel and other minor, infrequent and irregular private travel?

Question

We understand that certain cars are exempt from FBT where there is no private use of the car during the year of tax and at a time when the benefit was provided other than:

work-related travel of the employee; and

other private use by the employee (or an associate of the employee) that was minor, infrequent and irregular.

We have followed the definition of work-related travel under s. 136 of the FBTAA:

‘Work-related travel, in relation to an employee, means:

(a) travel by the employee between:

(i) the place of residence of the employee; and

(ii) the place of employment of the employee or any other place from which or at which the employee performs duties of his or her employment; or

(b) travel by the employee that is incidental to travel in the course of performing the duties of his or her employment.’

We note that one of the conditions that must be met before a car parking fringe benefit can arise is (s. 39A(1) of the FBTAA.

‘(g) on that day, the car is used in connection with travel by the employee between:

(i) the place of residence of the employee; and

(ii) that primary place of employment;’

We wish to clarify whether we have to pay FBT on ‘car parking’ of a utility truck designed to carry a load of less than 1 tonne where there is no FBT payable on this vehicle due to usage being limited to work-related travel and other minor, infrequent and irregular private travel?

Answer

If the utility is a ‘car’ (i.e. designed to carry a load of less than 1 tonne) then, despite the fact the utility may qualify for FBT exemption pursuant to s. 8 of the FBTAA, a car parking fringe benefit can arise where all the relevant conditions of s. 39A are met. Although ‘home-to-work’ travel is considered work-related travel for the purpose of applying the FBT exemption to these type of vehicles, it is still travel between the primary place of residence and primary place of employment for the purpose of paragraph (g) of section 39A(1) of the FBTAA. As such, this condition will be satisfied in considering whether a car-parking fringe benefit arises.

If the utility is not a ‘car’ as defined, then the provision of the car to the employee will be a residual benefit that may qualify for FBT exemption pursuant to s. 47(6) of the FBTAA. A car parking benefit cannot arise in respect of such vehicles as they are not ‘cars’ as defined.

Further, s. 58G(1)(b) of the FBTAA provides an exemption from fringe benefits tax for residual benefits that consist of the provision of ‘non-car’ motor vehicle parking.